Sabanci Holdings – 2011 TMMBA International Study Tour Visit

We kicked off our Study Tour in Istanbul with a visit to Sabanci Holdings, the parent company of Sabanci Group, a massive Turkey-based conglomerate.  We met with Mr. Vecih Yilmaz, who works in the Budgeting, Consolidation, and Investor Relations Department.  Mr. Yilmaz was great, and was a stand-out presenter because of the patience, attentiveness, and detail he provided in both the presentation and Q&A sessions. 

Right off the bat, we were learned a couple interesting facts about Sabanci from Mr. Yilmaz:

1)      Sabanci Holdings is really BIG, directly accounting for 4% of the Istanbul Stock Exchange’s (ISE) market cap, and 13% of the ISE’s market cap when factoring in the 74 companies that Sabanci is involved in at the holding level. 

 2)      Sabanci has major operations in seemingly unrelated areas – including financial services, energy, retail, cement, automotive, tire and tire reinforcement materials. 

Sabanci prides itself on quality, long-term investments, and local expertise in the Turkey market.  As a result, Sabanci is a preferred partner for many foreign firms looking to enter the rapidly growing Turkey market, often via joint ventures (JVs).  Sabanci already has JVs with significant multi-national companies such as Bridgestone, Citigroup, Carrefour, Hilton, and Philip Morris.  One of the requirements by Sabanci in its selection of JV partners is a shared commitment by the JV partner to doing business in and investing in Turkey, long-term.  We found Sabanci to not exclusively be concerned about their own company’s prosperity, but about the overall welfare of their country of Turkey long-term.  This was a refreshing viewpoint that was pleasantly shared by other Turkish companies that we visited on our trip. 

Since we just learned about joint ventures last quarter in the TMMBA program’s Global Strategy class, a couple JV-related questions were asked of Mr Yilmaz, including how ownership of the JV was typically divided between Sabanci and the JV partner.  Mr. Yilmaz stated that most JVs are split 50-50.  We learned in our Global Strategy class that a 50-50 split is difficult to work with due to potential ownership disputes, however Sabanci stated that it has worked well for them in the past.  In their situation, the JV partner typically provides the operational skills needed by the JV, and Sabanci provides the strategic skills needed for the JV to start and later expand in Turkey. 

One of the final things we learned about Sabanci we began learning in our discussions with Mr. Yilmaz but really learned after our discussion with Mr. Yilmaz – mostly on the bus driving around Istanbul.  That is, how good a job of branding Sabanci does with its JVs.  Their method of branding JVs is creative, and I’m sure was noticed by Dan Turner (who was on our trip) from a Marketing perspective.  Sabanci uses the short-form “SA” to represent Sabanci, and tends to incorporate its short-form into the name and/or logo of several of its joint-ventures, further reinforcing both i) Sabanci’s brand and ii) the JV’s brand.  See JV examples below: 

Now that’s real branding for you!